A high percentage of applications were cancelled by the applicant during the application process

A high percentage of applications were declined by credit underwriting due to missing application data

The application approval process was not customer-centric

Their lengthy credit application included additional product options made conditional on approval

Applications with missing data were put in a time-consuming, risk management-operated work queue which increased abandonment

Their highest potential value customers were inconvenienced the most because they were the most likely to leave some application questions blank

Solution

The NAS partners helped this client better understand the issues and to develop a streamlined, customer-centric application process:

As the result of applicant focus group research combined with empirical analysis of past applicant data, they now have a clear understanding of the key drivers causing applications to be abandoned

They learned that applications missing data were most likely to be from women and/or high potential-value applicants

They learned that female applicants were twice as likely to abandon the application process as their male counterparts

Applications were redesigned to be shorter with questions like “are you married?” removed after learning that women found them to be offensive - and the data wasn’t even used

Additional product options were removed after learning that the addition of an optional offer requiring one more signature from the applicant caused a 10% response rate reduction

The application process became much more customer-centric with applications segmented prior to underwriting to handle the highest potential applicants missing critical data elements with a quick “welcome” process” prior to credit underwriting

Results

This client was able to increase both the volume and quality of new customer accounts:

The overall proportion of high value applicants approved was increased by 55%

The female application abandonment rate fell to the same as the males

The new customer welcome process, applied only to the high potential segment, increased total first year spend and additional product sales by 25%

Offer response rate was increased by 10%

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Biography

Ric Struthers

Richard K. Struthers is President of Ashford Point Enterprises, a financial services consulting company. Prior to Ashford Point, Ric served as Bank of America’s President of Global Card Services. He was a founding member of the management team of MBNA America, which was later acquired by Bank of America. Ric is an alumnus of Penn State University and serves as an advisory board member for the Smeal College of Business. Ric is also a graduate of the University of Virginia Retail School of Banking.